barjon
Legendary member
- Messages
- 10,752
- Likes
- 1,863
off out again with a few points in azn tucked away.
intrigued by bonsai/hooya exchange yesterday about what leads
what. I've never been able to understand why ta should work
on ftse since it merely reflects what is happening with its
constituents. By the same token don't see how futures can affect
it unless the tracker funds re-act and have a significant influence?
Accordingly, my logic has it that the ftse must lead the futures. Am
I too much a simpleton?
have a profitable day
intrigued by bonsai/hooya exchange yesterday about what leads
what. I've never been able to understand why ta should work
on ftse since it merely reflects what is happening with its
constituents. By the same token don't see how futures can affect
it unless the tracker funds re-act and have a significant influence?
Accordingly, my logic has it that the ftse must lead the futures. Am
I too much a simpleton?
have a profitable day
hey barjon, that's not nice.
I can't disagree with you now without implying you're a simpleton
and I know that isn't true.
Have you been reading Stephen Potter ?
A major function of program trading is to sell the futures and buy the cash.
That's what keeps fair value within bounds.
But they cant buy the cash and its not practical anyway to buy all 100.
They have to buy a selection that reflects cash.
So which comes first ?
Neither if they can help it !
I can't disagree with you now without implying you're a simpleton
and I know that isn't true.
Have you been reading Stephen Potter ?
A major function of program trading is to sell the futures and buy the cash.
That's what keeps fair value within bounds.
But they cant buy the cash and its not practical anyway to buy all 100.
They have to buy a selection that reflects cash.
So which comes first ?
Neither if they can help it !
Another question I came up with in my sleep last night. Why bother having an index future, does it provide any benefit. I understand that individual stocks are useful as they provide a way of comanies raising capital and also provides a simplistic way to trade companies but can't see the benefit in having a Futures market, other than for the houses and traders to make money?
Why bother having an index future, does it provide any benefit.
Futures markets exist to offer a means of offsetting risk.
They provide the greatest plus of additional liquidity to the overall market place.
Look at the rise in trading volumes in the FTSE since the introduction of its future.
This has led, in turn, to much tighter spreads on share quotes.
As an example of managing risk, an investor might be nervous of the market over the near term, but positive over the long-term.
A short term sale would incur costs (spread, commission and also might incur a CGT liability.) One way of achieving a reduction in the risk is to sell the futures while maintaining his underlying positions.
On the other hand a investment manager might be aware of new money coming into his/her fund in the future, but is also nervous of missing a good buying point. A timely buy of the futures could cover that risk, which would be redeemed on the arrival of the money.
Futures markets exist to offer a means of offsetting risk.
They provide the greatest plus of additional liquidity to the overall market place.
Look at the rise in trading volumes in the FTSE since the introduction of its future.
This has led, in turn, to much tighter spreads on share quotes.
As an example of managing risk, an investor might be nervous of the market over the near term, but positive over the long-term.
A short term sale would incur costs (spread, commission and also might incur a CGT liability.) One way of achieving a reduction in the risk is to sell the futures while maintaining his underlying positions.
On the other hand a investment manager might be aware of new money coming into his/her fund in the future, but is also nervous of missing a good buying point. A timely buy of the futures could cover that risk, which would be redeemed on the arrival of the money.
hooya
I think it's still fair to say that nothing about the UK stock market
is geared to the smaller investor.
Long gone are the days when the majority of shares were held
by members of the public.
The only possible exception I can think of was when the futures contract was reduced to £10 a point.
and that was relatively recently.
I think it's still fair to say that nothing about the UK stock market
is geared to the smaller investor.
Long gone are the days when the majority of shares were held
by members of the public.
The only possible exception I can think of was when the futures contract was reduced to £10 a point.
and that was relatively recently.
